ISOTeam (5WF) H1 2024 earnings summary

Executive summary

• 1HFY2024 revenue rose 16.5% YoY to S$62.7m; net attributable profit increased 34.0% to S$1.4m, matching FY2023 full-year profit at the half-year mark.

• Improved margins followed completion of pandemic-era low-margin projects and a sharper focus on core construction-related businesses.

• Order book stood at S$182.4m at 31 Dec 2023, supporting activity through FY2026.

• Stated goal was annual revenue of at least S$100m and consistent profit growth.

Financial highlights

• Revenue was S$62.744m, up 16.5% YoY; gross profit increased 67.0% to S$8.328m, with gross margin improving to 13.3% from 9.3%.

• Profit for the period was S$1.284m versus S$0.814m; presentation-basis NPAT was S$1.4m and excludes impairment loss on receivables and contract assets while including non-recurring other income.

• Other income fell to S$0.598m from S$3.260m, as the prior-year period included a S$2.447m gain on subsidiary disposals.

• Cost of sales rose 11.3% to S$54.4m and finance costs increased 19.8% to S$1.3m.

• Operating cash flow was S$1.311m, versus S$10.109m used in 1HY2023; cash and bank balances were S$11.3m, while cash and cash equivalents were S$7.142m.

Outlook and guidance

• Management was cautiously optimistic for FY2024, citing the order book and first-half net attributable profit matching FY2023 full-year profit.

• The S$182.4m order book was expected to support activity through FY2026; tendering was to remain selective across public and private projects.

• Priorities included strengthening the order book, protecting gross margins through delivery, procurement and tender pricing, conserving cash and digitalising processes.

• Autonomous painting drones were in late-stage development, with pilot programmes targeted for later 2024; external leasing could provide a new revenue stream.